IRS Tax Tip 2022-78,May 19, 2022<\/p>\n
A lot of families move during the summer. Taxpayers who are\u00a0selling their home<\/a> may qualify to exclude all or part of any gain from the sale from their income when filing their tax return. Here are some things that homeowners should think about when selling a home:<\/p>\n Ownership and use<\/strong> Gains<\/strong> Losses<\/strong> Multiple homes<\/strong> Reported sale<\/strong> Possible exceptions<\/strong>
\nTo claim the exclusion, the taxpayer must meet ownership and use tests. During a five-year period ending on the date of the sale, the homeowner must have owned the home and lived in it as their main home for at least two years.<\/p>\n
\nTaxpayers who sell their main home and have a gain from the sale may be able to exclude up to $250,000 of that gain from their income. Taxpayers who file a joint return with their spouse may be able to exclude up to $500,000.\u00a0 Homeowners excluding all the gain do not need to report the sale on their tax return unless a Form 1099-S was issued.<\/p>\n
\nSome taxpayers experience a loss when their main home sells for less than\u00a0what they paid for it<\/a>. This loss is not deductible.<\/p>\n
\nTaxpayers who own more than one home can only exclude the gain on the sale of their main home. They must pay taxes on the gain from selling any other home.<\/p>\n
\nTaxpayers who don\u2019t qualify to exclude all of the taxable gain from their income must report the gain from the sale of their home when they file their tax return. Anyone who chooses not to claim the exclusion must report the taxable gain on their tax return. \u00a0Taxpayers who receive\u00a0Form 1099-S, Proceeds from Real Estate Transactions<\/a>\u00a0must report the sale on their tax return even if they have no taxable gain.<\/p>\n
\nThere are\u00a0exceptions to these rules<\/a>\u00a0for some individuals, including persons with a disability, certain members of the military, intelligence community and Peace Corps workers.<\/p>\n